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Internet firms to lose licences

People surf the internet at a cafe in Phnom Penh late last year. The Kingdom’s telecom regulator has said that 34 companies have until the end of the month to prove they are providing services to customers or their licences will be revoked.
People surf the internet at a cafe in Phnom Penh late last year. The Kingdom’s telecom regulator has said that 34 companies have until the end of the month to prove they are providing services to customers or their licences will be revoked. Hong Menea

Internet firms to lose licences

Cambodia's telecom regulator will strip the operating permits of more than 30 private companies licensed to provide internet and Voice-over-Internet Protocol (VoIP) services unless they can demonstrate that they are commercially active and operating in accordance with their licensing agreements, a telecom official said yesterday.

Im Vutha, director of the regulation and dispute unit at the Telecom Regulator of Cambodia (TRC), said 34 companies holding a total of 42 ISP and VoIP licences have until the end of the month to submit invoices and other details proving that are actively providing services to customers, or lose their licences.

“We want to enforce our [regulatory] procedures and push them to demonstrate that they are currently providing services, and to pay their annual tax obligations as well,” Vutha said.

He said that according to TRC regulations, in order to purchase or renew a telecom licence investors must deposit $10,000 for an ISP or $50,000 for a VoIP provider. If the operator fails to deliver services within one year the licence is voided and the deposit is forfeited – though the regulation has not been enforced.

Vutha said the 34 companies were requested three times since 2014 to provide proof of their commercial activities, but had not complied. This was the final warning.

“Actually, they already lost the right to their licence, but we want to give them a chance to renew it, if they want to continue”, he said.

Several ISP and VoIP providers voiced support for the TRC’s initiative, which aims at tightening oversight of the telecom sector and removing some of the deadweight that has discouraged investment.

“There are a lot of licences now and most of them are unused,” said Paul Hogan-Blanche, CEO of internet provider Ezecom. “A lot of ISPs got them years ago with no idea about how they were going to use them.”

Cambodia has a total of 31 ISPs and 22 VoIP providers serving over 21 million mobile phone users and 5.8 million internet subscribers, according to latest government data. Another 26 ISP and 16 VoIP licences have been issued but are considered inactive.

Hogan-Blanche said while competition is healthy for the sector, the presence of dozens of tiny ISPs and VoIP providers could make the sector unattractive for potential investors ready to develop infrastructure or deploy new technologies.

“If you have too many ISPs, you could lose a proper investor,” he said.

Srey Sounera, chief operating officer of internet provider WiCam Corporation, said his firm supports the TRC initiative as it levels the playing field for all companies operating in the sector.

He said while licensed ISPs and VoIP operators are required to pay an annual tax to the TRC, some companies feign inactivity to avoid paying their dues, which allows them to undercut the prices of other operators.

“If they are active but don’t pay the annual tax, it means they can offer Internet service cheaper than those who follow the TRC’s procedures,” he said.

The annual tax on ISP licences is 10 per cent of revenue, while VOIP license holders are required to pay 2 per cent of annual revenue as tax.

Sounera said WiCam’s business is mainly through its ISP licence, though it also holds an unutilised VoIP licence.

“Right now, we don’t provide VoIP because it costs us a lot to do so, though we’re still paying the tax on the licence,” he said. “We’ll start providing VoIP again when there is a good opportunity in the market for us.”

Keuk Meng Leang, director of Internet provider Maximum Business Information Technology (MaxBIT), said that some of the ISPs named on the TRC’s list, such as ClickNet, stopped providing services many years ago.

“Many internet companies gave up their licence because they found it was hard to earn a profit as it required expertise in the sector and investment in hardware.”

So Vathana, internet department supervisor at South Korean-backed developer World City Co Ltd, one of the 34 companies the TRC claims has an inactive licence, said the company will dispute its inclusion in the list.

He said the company’s ISP provides internet services to many residential users of its Camko City project, and plans to expand its subscriber base.

“We were surprised to hear that we were on the list,” said Vathana. “Now my director is working on resolving this case with the TRC”.

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